In the presidential election of 1928, Al Smith was defeated by Herbert Hoover, a wealthy mining engineer who had served as commerce secretary for both Presidents Harding and Coolidge.

Hoover had headed European relief efforts after World War I. "He is certainly a wonder," exclaimed the young Franklin D. Roosevelt, "and I wish we could make him president of the United States. There couldn't be a better one."

As secretary of commerce, Hoover proposed to eliminate destructive economic competition through the establishment of trade associations working in cooperation with government. By 1929, more than 2,000 trade associations had been created.

When Hoover campaigned for the presidency, the country seemed headed toward ever greater economic prosperity. In a campaign speech, he said:

We in America today are nearer to the final triumph over poverty than ever before in the history of any land. We shall soon, with the help of God, be in sight of the day when poverty will be banished from this nation.

In his first steps in office, Hoover created the Federal Farm Board to increase farmers' income. He also called for a system of private, voluntary old-age pensions. The collapse of the stock market, however, shattered his vision of a private economy operating largely free from government intervention.